1987 (3) TMI 54 - HC - Wealth-tax

Summary

Issues Involved:
The issue involves the jurisdiction of the Appellate Assistant Commissioner to direct the Wealth-tax Officer to refer the matter to the Valuation Officer as provided by section 16A of the Wealth-tax Act, 1957.

Judgment Details:

Background:
The assessee, a Hindu undivided family, appealed against the orders of assessment passed by the Wealth-tax Officer for the assessment years 1975-76 and 1976-77. The Appellate Assistant Commissioner set aside the assessment orders and directed the Wealth-tax Officer to refer the valuation of immovable property to the Valuation Officer before making a fresh assessment. The Tribunal dismissed the appeal, leading to the reference of the question of law to the High Court.

Contentions:
- Counsel for the assessee argued that the Appellate Assistant Commissioner exceeded jurisdiction by directing the Wealth-tax Officer to refer the valuation to the Valuation Officer under section 16A of the Act.
- Counsel for the Revenue contended that the Appellate Assistant Commissioner had wide powers under section 23(5) of the Act to pass any order he deemed fit.

Legal Provisions:
- Section 7 of the Act deals with asset valuation by the Wealth-tax Officer.
- Section 16A allows the Wealth-tax Officer to refer asset valuation to the Valuation Officer.
- Section 23 outlines the appeals process, including the powers of the Appellate Assistant Commissioner.

Analysis:
- The discretion to refer valuation to the Valuation Officer lies with the Wealth-tax Officer based on forming an opinion on the fair market value.
- The Wealth-tax Officer, as a quasi-judicial authority, must independently form the opinion required by section 16A, not directed by the Appellate Assistant Commissioner.
- While the Appellate Assistant Commissioner can order further inquiry by the Valuation Officer, this is contingent on an earlier inquiry being conducted, which was not the case here.
- The Tribunal erred in holding that the Appellate Assistant Commissioner had jurisdiction to refer the matter to the Valuation Officer under section 16A.

Conclusion:
The High Court answered the question in the negative, ruling in favor of the assessee. Each party was directed to bear their own costs in this reference.